Below is the text of Mr Major’s press conference in Munich, held on Wednesday 8th July 1992.

PRIME MINISTER:

Perhaps I could firstly add my thanks to Chancellor Kohl and his colleagues in the German government, to the government of Bavaria, to the City authorities, and perhaps above all to the people of Munich who had to face, as is inevitably the case on these occasions, some disruption to their lives. I am very grateful for their forbearance, I hope that next time I can walk in Munich in the streets rather than be part of a large number of cars that are blocking up the streets, and I look forward to that.

May I now turn to the summit discussions. I think most of you will know when these discussions were first established some years ago, they were originally intended, as an informal opportunity for Heads of Government to talk. Over the years that original format has tended to change, they have become more elaborate, more formal, better prepared, but also I think engendering higher expectations.

In this summit I think there have been some achievements and also some disappointments. We have met in the last couple of days against the background of a world economy that is still sluggish, a good deal more sluggish than we would wish to see it. All of us would like to see faster growth, but we are having to deal with the aftermath of a revolution as well as a recession. The revolution, of course, is still going on in Russia and even here in Germany there has been a revolution of a kind and Germany is having to use all its motor power to kick-start its own economy and to deal with the difficult problems of what was once known as East Germany.

In our discussions, the difficulties of achieving non-inflationary growth were uppermost in our discussions. Unless we keep inflation down there is going to be no growth worth having. Recovery has been slower in coming than anyone anticipated and we all acknowledged that in our discussions, we agreed that we cannot achieve sustainable non-inflationary growth without a commitment to sound money and to fiscal policy.

There was one measure above all others, I believe, that will help, and that is a settlement of the Uruguay Round. A GATT settlement would give a very sharp, non-inflationary, boost to the world economy, a sharp boost I think also to confidence. But the specific boost to the world economy is equivalent to 195 billion dollars gain in annual world income and of that figure around 90 billion dollars would accrue to developing and to former communist countries. So it is a very great prize, that GATT settlement, when it is achieved, it would boost the economic transformation of Eastern Europe and the former Soviet Union, encourage developing countries to persevere with other reforms and check protectionism in world trade.

Quite bluntly, an agreement in that GATT round is essential. Some progress has been made, the CAP settlement is one illustration of that, better understanding of what remains to be done and the difficulties within individual states is another indication of progress. The remaining gap still to be settled in the Uruguay Round is relatively small. As far as Britain is concerned, we could settle our difficulties in thirty minutes, there is no difficulty there for us.

In our discussions I repeatedly stressed the importance and the urgency of a settlement. I think it was essential to have a discussion here and as a result of that we have got in the communique a firmer commitment to detailed negotiations on the outstanding issues than we have had before.

For Europe, the European Commission are of course our negotiators. But the United Kingdom, as Presidency of the Community, have an active role to play and we intend to play it, there is too much at stake to let GATT slip back down the agenda and we have no intention of letting that happen.

I mentioned a moment ago that among the countries that would benefit from a GATT settlement would be the former Soviet Union. We are about to have lunch and then an extended meeting with Mr Yeltsin. We do not, I think, just meet as creditors and debtor, but as partners. The measures agreed at the weekend with the International Monetary Fund are tough measures for the release of the first tranche of assistance to the Russians. They open the way to that first credit tranche, they point the way clearly to debt rescheduling, they allow the United Kingdom to release the 500 million dollars of export credit cover that I announced in principle when Mr Yeltsin came to London in January, and we shall now release it without delay.

The problems that Mr Yeltsin faces are huge and the dangers that he faces are enormous. Very clear evidence of what is at stake is shown by our interest in the safety of nuclear power plants in the former Soviet Union and Eastern Europe. Chernobyl, to some, may seem a long way away, but I must say to you it is pretty close at home to a sheep farmer in north Wales who, six years after the Chernobyl incident, still cannot sell his sheep at market. The scale of the problem is huge with a dozen stations like Chernobyl in the former Soviet Union alone.

We have to approach that problem in the following ways. Firstly, urgent safety work at the most unsafe power stations; secondly, to replace them with safe alternatives as soon as possible; and thirdly, to help the former Soviet Union develop alternative

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If we had been able to agree a decisive breakthrough to a GATT settlement, it would have been a huge bonus for the Munich summit. Britain, as I have said, can agree without delay, everyone will have to reach an agreement, the sooner that is done the better. If push comes to shove I am confident it can be done and for my part, push and shove I will, and so will the United Kingdom until we do have that settlement.

QUESTION (George Jones, Daily Telegraph):

Prime Minister, last year’s summit communique made optimistic noises about the prospects for recovery in the world economy, you meet here admitting that it is sluggish and you were over-optimistic, what hope do we have that this year's declarations will have any more substance by the time we meet in Tokyo next year?

PRIME MINISTER:

I think there are some signs of recovery and we can see them, but they are very slow and very sluggish. It was clear last year that like many other people we anticipated a stronger recovery and an earlier recovery than yet we have had. One of the ingredients of that, I am sorry to return to the point but I think it is a critical point, one of the ingredients to recovery is going to be confidence and one of the ingredients to confidence will be the security and certainty of reaching an outcome for the Uruguay Round.

Now that is a self-evident statement of reality. It is very disappointing, not the fault of this summit, but it is very disappointing that we did not have an agreement to the Uruguay Round some time ago, some nations have difficulty with it and I understand that, but I think the clear understanding amongst every participant here of the importance to world growth and to confidence of that agreement on the Uruguay Round was self-evident. So I think we are better placed than perhaps we were last year when we felt the recovery would come earlier, swifter and more effectively than in practice it did.

QUESTION:

[Inaudible].

PRIME MINISTER:

I rather agree with that, I perhaps would not have expressed it in quite that way, but I rather agree with that. That was why I was the first Western Head of Government to say that I would go to Rio and why I am delighted that so many Heads of Government went to Rio for what was the start of a process, it was never going to be totally solved at Rio, just as it will not be totally solved by an interruption. But he clearly cares very deeply about it, the mistake he perhaps makes is to believe that other people do not care deeply about it as well and I believe that they do.

QUESTION (Peter Jay):

Are you disappointed in the results of your personal GATT initiative and do you apportion the blame for this to an over-estimate of American support or to an under-estimate of French obduracy, and do you agree, on reflection, that Munich is no place for British Prime Ministers to seek to make historic agreements?

PRIME MINISTER:

I think we have made progress on GATT, I am not here to apportion blame for the fact that we were not able to make more progress, I am going to have to negotiate and talk with colleagues and apportioning blame is not a good basis for getting future progress subsequently, what I want is an agreement. I think it would have been intolerable if we had not raised the matter and discussed it here and I think there was general agreement about that.

What is becoming increasingly apparent is the narrowness of the differences that actually exist. And with political will and political determination and political instruction, the negotiators will be able to reach a GATT agreement, that has been quite apparent from the discussions that we have had here in the last few days. So I think it has given a further impetus.

And perhaps I can put the point to you the other way round. If I had not raised it and if others perhaps had not raised it and there would have been no discussion of GATT at Munich, what signal would that have given about the determination of people to reach a settlement? It had to be raised even though it was probably not practicable to expect a full settlement here, not least because all the negotiating partners are not here to reach a settlement. But it was imperative that the attempt was made and that the fact that this is of central importance was once again registered and accepted by the Heads of the most powerful industrial countries. So I think it was right to come here and raise the matter and. I think it has been helpful to have done so.